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Undertakings Achieved  appointment of the CEO of Openreach (5.24)  establishment of the Equal Access Board and Office ( )  publication of Estimated Space Availability Details (7.1.2)  Openreach brand developed in accordance with 5.48 The accommodation the Openreach top team will require has been identified in readiness for delivering Undertaking Openreach build on schedule

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Working with customers Primary channel for its products; full service; active marketing and sales Three approaches to account relationships for Openreach products Buy only from Openreach Buy from Openreach and other BT businesses Buy products only from other BT businesses Direct relationship with Openreach only Parallel relationship with both Existing account relationship only Orders, faults, bills > deal directly with Openreach 1 23 Customer communications NovDec Implementation Jan 06 Full operation Mar 06

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Local Loop Unbundling: KPIs Openreach will publish existing LLU KPIs to demonstrate that Industry receives the same service as BT Percentage of MPF and SMPF orders provisioned by customer agreed date. This applies to all CPs including BT’s downstream businesses Percentage of MPF and SMPF faults cleared within 40 clock hours. This applies to all CPs including BT’s downstream businesses. The two key current KPIs related to equivalence are as follows:

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Migration will be complete by June 2010 ISDN line migration complete by 2009 WLR2 Product withdrawal to be agreed with industry Wholesale Line Rental Openreach will supply WLR3 through equivalent systems and processes From 1/1/07 new end user customers will be provided through EoI systems Existing customers of BT Retail may still be managed by direct access to CSS

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WES and BES EoI by September 2006 WES A, WES B and WEES subject to request Several Backhaul Undertakings including Aggregation IBMC date for BT’s relevant retail Ethernet-based local area network extension service March 2007 BT’s Undertakings: WES and BES

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Design Options being discussed with Industry Wholesale Extension Services – Access(WES-A) From End User site to Local Access Node Wholesale Extension Services – Backhaul(WES-B) From Local Access Node to Local Access Node From Local Access Node to Major Access Node From Local Access Node to CP PoP site From Major Access Node to CP PoP site Wholesale Extension Services – Aggregation Aggregation of smaller sites prior to onward backhauling Wholesale End-to-End Ethernet Services(WEES) End User site to End User site

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Customer Business to Business Gateways Development to support increase in volumes via external interface for provision, repair and test and diagnostics. Removal of BTR/BTGS internal access to Woosh; eCo already compliant but may need to support small increase of volumes. Customer Information Development to support access via external website interface for availability checker and Customer Reports (BBCR) No daily increase of volumes but improvements to stability. Product Incompatibilities Enhancement to existing process to ensure all cases are dealt with in an equivalent manner. System & Process Interdependent Changes 2w

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Woosh Functionality Improvements to ease of access for testing via btw.com, along with access to a new functionality to enable batch session kill for all CPs. Access to further diagnostic tools via btw.com are planned. Customer Communication imminent. Enhanced Billing Terms & Conditions Currently only one bill is provided per legal entity - in future, multiple bills will be available for “accounts” provided there is physical separation between the networks related to these different “accounts”. Customer Communication being planned. Escalation Process – Provision and Repair There has been a complete review of the BT internal escalation processes to ensure compliance Further internal communications and training has taken place Upgrade Changes for Communications Providers 3

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IPStream Migrations Migration in scope for December 2005 FromTo Dec 2005 TSR Compliant YesIPStream Yes* YesIPStreamDatastreamYes* YesDatastreamIPStreamYes* Yes IPStream/ Datastream SMPFYes* YesSMPF IP Stream/ Datastream Yes* No IPStream/ Datastream + BTR PSTN or WLR MPF In scope for June 2006** NoMPF IPStream/ Datastream + BTR PSTN or WLR In scope for June 2006** All Communications Providers to experience: Standard lead times Same order gateways Same process for migrating Same reporting mechanisms Same pricing Same systems * Subject to outcome of validation process ** Subject to agreement with OfCom

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Guiding Principles – a common baseline Meet both the letter and the spirit of the Undertakings Maintain operational efficiencies, where no conflict with Undertakings Design implementation in an efficient manner Drive changes in both behaviour and outcome Transform into a high-quality and responsive wholesaler

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TRANSPARENCY For PPCs, CPS and DataStream BT shall: within three months of these undertakings taking effect provide sufficient transparency to other Communications Providers (CPs) to enable them to identify and understand any differences between the matters BT is required to list in its reference offer pursuant to the relevant SMP condition in connection with the above products and services which it provides to other CPs and the comparable products and services that it supplies to itself; use reasonable endeavours at all times to resolve any outstanding issues with any other CPs concerning the provision of [those products] to that CP For TILLAPs/TILLBPs: ensure the costs attributable to TILLAP/TILLBP (when provided) form part of the cost stack for BT’s relevant PPCs

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DATASTREAM ISSUES MANAGEMENT BT Wholesale procedure introduced to track and manage customer Datastream raised issues. BT Wholesale Account Managers will register the Issue on behalf of the customer and provide feedback Communications to BT Wholesale Account Managers to be completed early December with process formally launched by the 22nd December 2005

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PPCs - Issues Management Specific information and examples of how we provide comparable products to ourselves. Links to a number of websites and documents which provide significant detail on our internal arrangements Ability to provide customers with sufficient information to enable them to raise informed questions and issues should the need arise.

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PPCs – next steps PPC Product Team will be engaging with Industry & Ofcom in the following forums: Quarterly Industry Forums PPC / Ofcom quarterly Forums Issues raised at these meetings are discussed, logged and investigated, resulting in a conclusion satisfactory to both parties.

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CPS As CPS is not supplied internally there is no need for an IRO. BT is however required to address customer issues and this process is well advanced

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CPS - Issues already addressed What has changed? CPSOs now able to place CPS Orders on Saturdays CPS Gateway SLAs new targets at 98% (up from 90%) BTR now required to follow forecasting regime as documented in the CPS Process Document and forecast CPS “Return to BT” orders BTR now charged for CPS “Return to BT” orders Complete list of “conflicting products” now on BT Wholesale CPS web page All the above changes are already in place and being utilised

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CPS Issues What is planned to change? Availability of the NAD to help with “Post Code” mismatch rejections This will be available from December 2005 (this is the address matching service) Migration of customers between “Calls Products” and “Calls Providers”, to include a “bulk” capability This enhancement is currently in design and planned for launch April 2006 CPSOs will have the capability to manage Change Of Address (different number) orders This enhancement is currently in design and planned for launch August 2006

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CPS What is currently being investigated? BT is investigating the possibility of giving CPSOs the capability to invoke “Cancel Other” via the CPS Gateway This requirement is currently subject to a feasibility assessment, due to report in December 2005 BT and CPS Industry have suggested a review of the “reasons for rejection” of CPS orders The Industry have agreed that this activity should be carried once the WLR3 rules have been understood and agreed, expected mid to late 2006

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CPS – next steps BT will continue to engage with industry via the following Industry forums; Ofcom Service Providers Forum - Quarterly WA and CPS Commercial Group - Monthly CPS Process Group - Monthly WA and CPS IT forum - Monthly CPS Order Desk Managers Meeting - Quarterly Issues are raised at these meetings and discussed on an Industry wide basis, resulting in the implementation of enhancements to the product and/or system.

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Delivering the TSR - systems Colin Windsor

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Delivering the TSR - A major systems opportunity… Unify the customer experience Customer Experience 21 CN End to end monitoring Increase the pace to the 21 CN architecture Design for an end to end, right first time approach Platforms Integrity and Scalability Move from product silos to platforms, independent of customer, product and organisation Design for scale, test and resilience

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... but a major systems programme Customer Migration Develop Infrastructure and Deliver Retail Build systems infrastructure to support the retail customer base Re-engineer 200+ processes Retrain customer centers Remove access to CSS Plan for the migration of the 20+ million customers Wholesale Openreach Build systems infrastructure to provide support to BT and industry to the Openreach products (LLU, WLR, WES/BES) Build infrastructure to ensure Openreach can operate as a line of business Ensure that systems maximize the synergies in uniting the field force Change systems for equivalence Open up systems to enable Openreach to trade Design 21CN future products for equivalence Retrain customer centers Migrate 20+ million customers Scale systems Scale systems to support industry Systems separation Global Equivalence trading of products

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TSR Undertakings to end Dec 2006

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Changes to enable equivalence Products now layered. Gateways : Volumetrics Gateways : Downstream BT to use red side access Need to restrict systems - CSS/COSMOSS direct access Regulatory Audit – Open and Transparent working Field Service processes to change to become fully equivalent Equivalent product Service Wraps

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Ofcom also require full physical data separation between Openreach and the rest of BT by end June 2010 Additionally, Ofcom have set dates for “logical” separation of data Full systems separate in Openreach by June 2010 Openreach - Commitments

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Delivery Method Deliverables will be focused around 90 day cycles Each 90 day cycle considers –Requirements –Development –Deployment –In parallel Requirements gathered using collaboration forum Hot House used to define the How Directly with the CPs on the How Early exposure of functionality and interfaces to CPs CPs invited to Hot Houses Scope Bank to manage scope

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Working Group Structure & Governance We plan to utilise: – existing Industry Groups wherever possible. – existing Openreach or BT Wholesale representatives would continue to represent BT on these industry forums as experts & ‘buddies’. We will identify focused topics which we may decide to run dedicated and defined consultation working groups – new Industry Groups (and buddies) may be required for a defined period. We plan to run Quarterly feedback events to update progress – we expect this to start at the end of February